Building a Better Soda Tax

A new report explores the best way to build a soda tax—learn more here.

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By Donald Marron

Soda taxes won big at the ballot box in November. Voters in Boulder, Colorado, and three California cities (Albany, Oakland, and San Francisco) approved new taxes on sugary drinks. In Illinois, Cook County adopted one soon after.

The negative health effects of consuming sugar are a principal rationale for the new soda taxes. But the taxes have a design weakness. Instead of taxing sugar, they target drink volume. Oakland, for example, will tax sugary drinks at a penny per liquid ounce. That approach has the benefit of simplicity. But as Norton Francis, Kim Rueben, and I explore in a new report, it is blunt to focus on the drink rather than the sugar.

A better approach would be to link taxes to a drink’s sugar content. That content varies widely. A regular cola might have seven teaspoons of sugar in an 8-ounce serving, while an iced tea might have only two. Taxing those drinks at the same rate discourages soft drinks generally, but does nothing to encourage consumers to switch to less sugary options. Nor does it encourage businesses to develop and market lower-sugar options. Basing soda taxes on sugar content, in contrast, gives both consumers and businesses an incentive to switch to lower-sugar products.

Several countries have already taken this approach. Hungary, for example, targets its volume-based sugar tax at drinks with particularly high sugar content. The United Kingdom will have two volume-based taxes, one on medium-sugar drinks and a higher one on high-sugar drinks. And South Africa recently announced a tax based on added sugar content.

Sugar content is usually straightforward to measure—it’s listed on nutrition labels. As a result, most cities and counties that want to tax soda should find it feasible to link taxes to sugar content, unless they run into state limits on their taxing authority.

As I’ve noted before, soda taxes are a limited tool for improving nutrition. Well-designed taxes can discourage consumption of sugary drinks, which clearly contribute to obesity, diabetes, and other ills. But health depends on many factors, not just the amount of sugar one drinks. People may switch to other, tax-free alternatives like juice that also have lots of sugar.

Soda taxes also are regressive, falling more heavily on lower-income families. And they raise controversial questions about the role of government in our personal lives.

Given those concerns, reasonable people differ over whether such taxes make sense. However, if governments choose to enact them, they should target them as precisely as possible to the harm they are meant to reduce. For sugary drinks, that means targeting sugar, not drink volume.

Related News

Across our nations, kids arrive at school every day and find themselves surrounded by advertising, marketing, and even rewards that promote unhealthy foods and beverages and most parents aren’t aware that it is happening in their schools until they are shown a clear example.

For more than a decade, the Alliance for a Healthier Generation has empowered kids to develop lifelong healthy habits by ensuring the environments that surround them provide and promote good health. Our work with schools, communities and businesses has affected more than 25 million children.

The Voices for Healthy Kids Action Center is a project of the American Heart Association to support of the movement to help all children grow up at a healthy weight. The American Heart Association does not necessarily share the views of individuals, organizations, or government agencies in our network, but we work to highlight and share the work being done across the network to facilitate collaboration and participation within the movement.

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About Being a Leader

Leaders are people who are actively working - either professionally or as volunteers - to change policies and environments to help children eat better and be more active. We use the following criteria to evaluate whether to approve an applicant for Leader status with the Voices for Healthy Kids Action Center.

Do you meet the criteria below? If so, register as a Leader here. There is no cost to be a Leader.

Leader Approval Requirements:

At least one item must be checked within each of the following two categories:

1. Applicant is focused on changing policies and environments

They are working on one of Voices for Healthy Kid's six issue areas:

Ensure foods and beverages in schools meet dietary guidelines

Expand community access to high quality food

Expand physical activity programs in and out of school

Improve built environment in communities to increase physical activity

Use pricing strategies to promote purchase of healthier foods

Use regulation/policy to reduce youth exposure to unhealthy food marketing

They are working on other obesity-related issues, such as:

Transportation policy

Other

Their primary focus is working on individual behavior (e.g., teaching kids about food, play, etc.), but they have access to organizations that could provide opportunities to change environments, such as

Schools

Local Governments

Public Health Agencies

Food producers

Advertisers

Other

Their project is commercial, but contributes positively to changing policies and environments, such as:

Farmer's market

Supermarket

Farmer

Food company

Advertiser

Other

2. Applicant is organizing others or contributing to organizing efforts

They are organizing others by:

Doing training

Providing volunteer opportunities

Building contact lists of supporters to engage in advocacy

Holding events

Other

They provide support to organizations or leaders doing work changing policies and environments, such as:

Funding

Evaluation

Capacity Building

Research

Other

They are a leader in a governmental body that may be the target of organizing efforts to change policies and environments, such as a:

Federal or state agency

Mayor or other local executive office

Federal, state, county or local public health department

Federal, state, county or transportation department

Federal, state or local education agency or school board

Other

If the applicant claims to work for an organization, at least one item must be checked below:

3. Applicant works for an organization:

Has an email address that matches the domain of the organization they list

Is listed on the organization website as staff

About Being a Blogger

The Voices for Healthy Kids Action Center is looking for bloggers who can write about issues that matter to our community on a regular basis. If you would like to be considered for this network, please check this box.

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Voices for Healthy KidsAction Center

Welcome! The Voices for Healthy Kids Action Center is designed to support you as we work together to help all kids grow up at a healthy weight. Join the growing movement!